Tuesday, March 09, 2004

Must... post...

By: Michael Akerman

Is it just me, or has absolutely nothing important happened recently? You know, other than Kerry being... you know... a member of the risen dead, but that's beside the point.

However, I'm tired of Ed's sniveling whiny post, so I have to occlude it.


Something in an abstract sense.

I've done race...



Smith and I started talking today about monopolies (in this case, government-sponsored monopolies, which I actually agree with him on).

Competition is a strange beast. It seems so two-faced, so fickle. People see that a company that owns a huge portion of a market causes other companies to close. This is "bad" to most people. It makes people lose jobs (technically true, but hold on), and seems to "hinder competition" (this is the basis for antitrust laws).

However, this is not truly the case. Monopolies are in fact the children of competition. They can only exist because of strong competition, or government sponsorship. When born of competition, it's because they are merely much, much better than the competitors at providing their product or service. This serves to logic: how else would someone become superior to someone except by being better (aside from the government)? However, here's the rub: people then believe that monopolies can become (or unconditionally do become) extortionary and that they prevent other companies from getting their good products out (the infamous buy-out).

Not the case. The monopoly must maintain the high level of quality and service, and low prices that brought them to the top. A myriad of people wait in the wings for an opportune moment to slip their product in and get a following (welcome to America). In fact, a monopoly can prime the market for innovative new products that wouldn't exist without the firm and broad foundation created by the original monopoly.

Let's take Microsoft as an example (everyone's favorite monopoly). I invite you to ask anyone who was actually around and active with computers during the days of DOS. I assure you, DOS is completely illogical and anti-user (it could be less user-friendly, but then it'd be packaged with a pipe bomb. Ha ha! I made a funny). Windows was the first OS that made computers accessible to the large majority of people. People snatched up Windows as quickly as possible. Then came Mac. Mac sucked. A lot. Windows still entirely conquered the OS market.

Then they began packaging IE in with Windows. IE was, again, user-friendly, readily available, and the most compatible with websites. Netscape complained that they couldn't make a dent in the market. Well, they couldn't... and they shouldn't have. It was slower than IE, less intuitive than IE, and less compatible than IE. The competitors were not blocked by Microsoft. They merely had low-quality products.

Of course, Windows had its issues. It was slow in certain applications, and didn't work too well for hardcore gamers. It was relatively unstable when pushing it hard. All of these problems were merely results of making the OS user-friendly. The self-install programs, automatic setup programs, automatic driver controls, etc. that people needed because they couldn't do these things themselves were not entirely reliable all the time (it's a computer, not God). Drivers were messily installed, programs left scraps behind, drivers weren't run as efficiently as possible. This was fine, for most people. But most people weren't the ones complaining about it. Nerds were.

The nerds began a quasi-phenomenon of Microsoft mockery. They pointed out those things that had never bothered, and still don't bother, most people, and people began to notice. This is when it was complained of as a monopoly with a poor product. And to me, it does have a poor product. But for most, it's the easiest and most effective OS.

Microsoft opened the way for other Windows-like OS's. Mac got a lot better at making their OS, and became the media editing platform. It was a very specific niche, but they have become successful at it. Hardcore gamers and computer users wanted a fast, stable OS that they could modify to their liking. Along came Linux, which was free and fast and reliable, but very very very hard to use (it's getting easier now).

So, Microsoft was not a bad product, nor a bad company. The market needed it, and other companies couldn't match it. But now the market is maturing past the user-friendly stage, and they need more specialization.

Then there's government-sponsored monopolies. Government-sponsored monopolies do not generally start with a good product, a good service, nor a good price. They have no motivation for good products or services, because they are naturally immune to any threat. The consumer cannot choose the better price or quality, and the company is free to raise the former while lowering the latter. For instance, the school cafeteria is this kind of monopoly. The food (obviously) is nothing to write home about, and the prices seem to keep rising, with ever more restrictions. They are free to promise things without carrying them out, and provide low quality food, because they can't lose. I've even considered the possibility of boycott, but this would be pointless. The company would merely be reimbursed by the government.

So, monopolies are a natural and even beneficial result of capitalism, and government-sponsored monopolies are wasteful, almost invariably corrupt children of socialism.

..."anyone who laughs is a Communist" ~Fry, Futurama...